Cummings Economics The Cairns Economy Recent Movements and Short-Term Prospects Presentation to the Cairns Chamber of Commerce Luncheon August 2007 Cummings Economics Ph Fax Web: Bill Cummings - Principal  Cummings Economics  Compass Research  North Australia Research Group

The Cairns Economy August 2007 The past year has more than met expectations of continuing strong growth predicted in last year’s review.

Population - Growth Growth on Previous Year, Cairns Region (Estimated Residential) The Cairns Economy August 2007 Source : ABS.

Long-Term Projections of Residential Population Growth Cairns City Government Projections The Cairns Economy August 2007 Low1.5% pa Medium1.8% pa High2.1% pa Actual Long-Term 1976 – % pa Actual 2001 – 2006 from Census Data 2.5% pa

Aggregate ‘Real’ Taxable Incomes Growth – Cairns Region The Cairns Economy August 2007 Source : BTRE & ATO.

Value of Building Approvals Far North Qld Statistical Division Source : ABS. The Cairns Economy August 2007

Dwelling Approvals Far North Statistical Division The Cairns Economy Cummings Economics August 2007 Source : Cummings Economics from ABS data.

Population Growth Rates – Cairns 1976/77 to 2005/06 Source : ABS The Cairns Economy Cummings Economics August 2007

Cairns Airport – Domestic & International Terminals Total Arriving & Departing Passengers % Increase on same month Previous Year Source : CPAThe Cairns Economy August 2007

Growth in Room Nights – Hotels/Motels (1)First 3 quarters. Source : ABS. The Cairns Economy August 2007

Cyclone Impact Nett Stimulatory to Economic Activity The Cairns Economy August 2007 Est Loss of Income: Crops $470 m Est Infusion of Funds: Insurance Claims $420 m Cyclone Relief $350 m $770 m

Sugar Prices The Cairns Economy August 2007 Source : ABARE

Beef Prices The Cairns Economy August 2007 Source : ABARE

The Cairns Economy August 2007 FISHING IMPORTANT PART OF OUTSIDE EARNINGS MINING INCOME RISING

The Cairns Economy August 2007 GROWING OUTSIDE EARNINGS OF SERVICE INDUSTRIES

The Cairns Economy August 2007

The Cairns Economy August 2007 AVIATION & MARITIME SERVICING BUSINESS SERVICES CREATIVE INDUSTRIES Expanding Outside Earnings

Major Development Projects by Area March Quarter 2007 The Cairns Economy August 2007

The Cairns Economy August 2007 Will the problems on “WALL ST” translate to “MAIN ST’ USA? If YES, How much would it affect a growing world economy?

The Cairns Economy August 2007 HIGHER INTEREST RATES LESS “CARRY TRADE” FINANCE MORE CAUTIOUS ATTITUDES TO INVESTMENT STEADYING EFFECT ON PROPERTY PRICES

Housing Affordability – Cairns Repayments as % of Income The Cairns Economy August 2007 Source : Cummings Economics & B Jacobsen based on data from RBA, ABS, RP data.

Australian Exchange Rates Aust $ / US $ The Cairns Economy August 2007 Source : RBA

5-Year Zinc Price The Cairns Economy August 2007

The Cairns Economy August 2007 Lacklustre Growth Growth in Domestic Market Falls in Some International Markets High Dollar, Loss of Air Services Rises in Domestic Airfares Australians Travelling Overseas Tourism

The Cairns Economy August 2007 Source : BTRE

The Cairns Economy August 2007 New Generation of Aircraft in 2008 Boeing Dreamliners Airbus A380

The Cairns Economy August 2007 Cropping for Biofuels Carbon Sequestration Interest in North’s Water Resources Non-Carbon Fuel Generation Climate Change Policies

The Cairns Economy ww.cummings.net.au August 2007 Source : Cummings Economics, Aug 2007

The Cairns Economy August 2007 Domestic Tourism Agricultural Products Fishing Industry Products Mineral Products Aviation & Marine Services Business Services Creative Industries Cairns Region Leads Northern Region in Sales to the Rest of Australia as Opposed to Sales to Overseas

Population – Comparative Size Comparative Populations – Northern Australia Census Count 2006 The Cairns Economy August 2007 Source : ABS Census data

The Cairns Economy August 2007 SOME NEGATIVES AND UNCERTAINTITIES AROUND, BUT CONTINUING SOLID GROWTH